DENVER, Aug. 5, 2020 /PRNewswire/ --
- Generated Cash from Operating Activities of $145 million in the quarter
- Invested $84 million in
the second quarter
- $26 million in free cash flow
after dividend
- Oil production averaged 78,000 barrels per day
Cimarex Energy Co. (NYSE: XEC) today reported a second quarter
2020 net loss of $925.1 million, or
$9.28 per share, compared to net
income of $109.3 million, or
$1.07 per share, in the same period a
year ago. Second quarter results were negatively impacted by
non-cash charges related to the impairment of oil and gas
properties. Second quarter adjusted net income (non-GAAP) was
$(52.4) million, or $(0.51) per share, compared to second quarter
2019 adjusted net income (non-GAAP) of $83.0
million, or $0.82 per
share1. Net cash provided by operating activities
was $144.7 million in the second
quarter of 2020 compared to $414.0
million in the same period a year ago. Adjusted cash
flow from operations (non-GAAP) was $144.5
million in the second quarter of 2020 compared to
$336.4 million in the second quarter
a year ago1.
Oil production averaged 78.0 thousand barrels (MBbls) per day.
Total company production volumes for the quarter averaged 254.7
thousand barrels of oil equivalent (MBOE) per day. Second
quarter production volumes were impacted by the operational slow
down announced in March and a 20 percent temporary curtailment of
May production related to the extreme fluctuation in oil prices
caused by the COVID-19 pandemic and the actions of OPEC and other
countries during the quarter.
Realized oil prices averaged $19.57 per barrel, down 64 percent from the
$54.24 per barrel received in the
second quarter of 2019. Realized natural gas prices averaged
$0.91 per thousand cubic feet (Mcf),
up 82 percent from the second quarter 2019 average of $0.50 per Mcf. NGL prices averaged
$7.52 per barrel, down 43 percent
from the $13.08 barrel received in
the second quarter of 2019.
Cimarex's realized oil price was impacted by a negative
differential to WTI of $8.28 per
barrel in the quarter from $1.99 per
barrel in the previous quarter, with a negative oil price
differential in the Permian of $8.12
per barrel in the second quarter, $2.00 per barrel sequentially. Our realized local
natural gas price differentials improved in both regions. The
company realized a negative differential to Henry Hub on its
Permian natural gas production of $1.09 per Mcf in the second quarter of 2020
compared to $3.10 per Mcf in the
second quarter of 2019 and $1.85 in
the first quarter of 2020. In the Mid-Continent region, the
company's average negative differential to Henry Hub was
$0.31 per Mcf versus $0.86 per Mcf in the second quarter of 2019 and
$0.57 in the first quarter of
2020.
Cimarex invested a total of $84
million during the second quarter, of which $49 million was attributable to drilling and
completion activities. Second quarter investments were funded
with cash flow from operating activities. Total debt at
June 30, 2020 consisted of $2.0
billion of long-term notes, with no debt maturities until
2024. Cimarex had no borrowings under its revolving credit
facility and a cash balance of $44
million at quarter end.
Outlook
Cimarex Chairman and CEO, Tom
Jorden, said, "The second quarter required drastic and
prudent action. Our response to the challenging price
environment included a significant decrease in activity and
curtailing May production volumes. With improved oil prices
we have elected to resume activity. We are bringing three
additional drilling rigs back to work in the third quarter and will
begin completing wells again in September with two completion crews
on the schedule. As a result, we expect capital investment
for the year to total approximately $600
million, in line with expectations of an operational restart
from our previous guidance range." The table below shows a
breakdown of the projected capital by category:
Capital Investment
($MM)
|
|
Updated 2020E
Guidance
|
|
Drilling and
Completion (D&C)
|
|
~ $430
|
|
Midstream/Saltwater
Disposal (SWD)
|
|
~
40
|
|
Other*
|
|
~
130
|
|
Total Capital
Investment
|
|
~ $600
|
|
*Capitalized overhead, production, NPL,
and technology
|
Cimarex is also giving production and expense guidance for the
remainder of 2020. Third quarter 2020 production volumes are
expected to average 230 - 250 MBOE per day, with oil volumes
estimated to average 69.0 - 74.0 MBbls per day. Total 2020
daily production volumes are expected to average 240 - 250 MBOE per
day, with annual oil volumes estimated to average 75.0 - 78.0 MBbls
per day.
Expenses per BOE of production for 2020 are estimated to be:
|
Production
expense
|
$2.90 -
$3.30
|
|
Transportation,
processing and other expense
|
2.10 -
2.40
|
|
DD&A and ARO
accretion
|
7.40 -
7.90
|
|
General and
administrative expense
|
0.95 -
1.15
|
|
Taxes other than
income (% of oil and gas revenue)
|
6.0% -
8.0%
|
Mr. Jorden continued, "This activity puts us in a strong
position as we enter 2021. We see Cimarex in a position to
generate more than enough free cash flow to fund our dividend in
2021 at $35 WTI, a testament to
increasing efficiencies. Any excess free cash flow would be
used to fund dividend increases and grow cash on the balance sheet
to retire debt."
"The health and safety of our employees remains top of
mind. Cimarex has taken a number of steps to protect
employees in the wake of the COVID-19 pandemic including the
implementation of a staggered office schedule and the adoption of
COVID-19 protocols for field staff and employees working in the
office."
Operations Update
Cimarex invested $84 million
during the second quarter, with 88 percent invested in the Permian
Basin and 12 percent in the Mid-Continent. Cimarex brought 37
gross (12.5 net) wells on production during the quarter. At
June 30, 73 gross (31.1 net) wells
were waiting on completion.
WELLS BROUGHT ON
PRODUCTION BY REGION
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended June 30,
|
|
Six Months
Ended June 30,
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
Gross
wells
|
|
|
|
|
|
|
|
|
Permian
Basin
|
|
17
|
|
|
44
|
|
|
52
|
|
|
56
|
|
Mid-Continent
|
|
20
|
|
|
66
|
|
|
39
|
|
|
92
|
|
|
|
37
|
|
|
110
|
|
|
91
|
|
|
148
|
|
Net
wells
|
|
|
|
|
|
|
|
|
Permian
Basin
|
|
11.1
|
|
|
31.9
|
|
|
30.9
|
|
|
36.9
|
|
Mid-Continent
|
|
1.4
|
|
|
7.8
|
|
|
1.7
|
|
|
10.7
|
|
|
|
12.5
|
|
|
39.7
|
|
|
32.6
|
|
|
47.6
|
|
Permian Region
Production from the Permian region averaged 185.7 MBOE per day
in the second quarter, a two percent decrease from second quarter
2019. Oil volumes averaged 68.8 MBbls per day, a three
percent decrease from second quarter 2019 and down 14 percent
sequentially.
Cimarex brought 17 gross (11.1 net) wells on production in the
Permian region during the second quarter. There were 47 gross
(31.1 net) wells waiting on completion at June 30. Cimarex is
currently operating three drilling rigs but no completion crews in
the region.
Mid-Continent Region
Production from the Mid-Continent averaged 68.7 MBOE per day for
the second quarter, down 20 percent from second quarter 2019 and
down 6 percent sequentially.
During the second quarter, 20 gross (1.4 net) wells were brought
on production in the Mid-Continent region. At the end of the
quarter, 26 gross (<1 net) wells were waiting on
completion. Cimarex is not currently operating drilling rigs
or completion crews in the Mid-Continent.
Cimarex's average daily production and commodity price by region
is summarized below:
DAILY PRODUCTION
BY REGION
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended June 30,
|
|
Six Months
Ended June 30,
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
Permian
Basin
|
|
|
|
|
|
|
|
|
Gas (MMcf)
|
|
417.8
|
|
|
379.3
|
|
|
433.4
|
|
|
360.1
|
|
Oil (Bbls)
|
|
68,791
|
|
|
70,669
|
|
|
74,198
|
|
|
67,835
|
|
NGL (Bbls)
|
|
47,291
|
|
|
54,813
|
|
|
48,111
|
|
|
50,567
|
|
Total Equivalent
(MBOE)
|
|
185.7
|
|
|
188.7
|
|
|
194.5
|
|
|
178.4
|
|
|
|
|
|
|
|
|
|
|
Mid-Continent
|
|
|
|
|
|
|
|
|
Gas (MMcf)
|
|
237.3
|
|
|
285.5
|
|
|
240.7
|
|
|
291.3
|
|
Oil (Bbls)
|
|
9,063
|
|
|
12,623
|
|
|
9,502
|
|
|
13,419
|
|
NGL (Bbls)
|
|
20,068
|
|
|
25,496
|
|
|
21,089
|
|
|
26,060
|
|
Total Equivalent
(MBOE)
|
|
68.7
|
|
|
85.7
|
|
|
70.7
|
|
|
88.0
|
|
|
|
|
|
|
|
|
|
|
Total
Company
|
|
|
|
|
|
|
|
|
Gas (MMcf)
|
|
656.0
|
|
|
665.8
|
|
|
675.2
|
|
|
652.5
|
|
Oil (Bbls)
|
|
77,956
|
|
|
83,430
|
|
|
83,873
|
|
|
81,433
|
|
NGL (Bbls)
|
|
67,402
|
|
|
80,362
|
|
|
69,251
|
|
|
76,680
|
|
Total Equivalent
(MBOE)
|
|
254.7
|
|
|
274.8
|
|
|
265.6
|
|
|
266.9
|
|
AVERAGE REALIZED
PRICE BY REGION
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended June 30,
|
|
Six Months
Ended June 30,
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
Permian
Basin
|
|
|
|
|
|
|
|
|
Gas ($ per
Mcf)
|
|
0.62
|
|
|
(0.46)
|
|
|
0.35
|
|
|
0.34
|
|
Oil ($ per
Bbl)
|
|
19.73
|
|
|
54.02
|
|
|
32.84
|
|
|
51.15
|
|
NGL ($ per
Bbl)
|
|
6.78
|
|
|
11.97
|
|
|
7.83
|
|
|
13.72
|
|
|
|
|
|
|
|
|
|
|
Mid-Continent
|
|
|
|
|
|
|
|
|
Gas ($ per
Mcf)
|
|
1.40
|
|
|
1.78
|
|
|
1.39
|
|
|
2.24
|
|
Oil ($ per
Bbl)
|
|
18.32
|
|
|
55.43
|
|
|
31.83
|
|
|
54.01
|
|
NGL ($ per
Bbl)
|
|
9.26
|
|
|
15.47
|
|
|
10.71
|
|
|
16.51
|
|
|
|
|
|
|
|
|
|
|
Total
Company
|
|
|
|
|
|
|
|
|
Gas ($ per
Mcf)
|
|
0.91
|
|
|
0.50
|
|
|
0.72
|
|
|
1.19
|
|
Oil ($ per
Bbl)
|
|
19.57
|
|
|
54.24
|
|
|
32.74
|
|
|
51.64
|
|
NGL ($ per
Bbl)
|
|
7.52
|
|
|
13.08
|
|
|
8.71
|
|
|
14.67
|
|
Other
Cimarex received cash settlements of $5.9
million related to its gas hedges during the quarter.
Settlement of oil hedges resulted in cash receipts of $58.1 million.
The following table summarizes the company's current open hedge
positions:
|
|
3Q20
|
|
4Q20
|
|
1Q21
|
|
2Q21
|
|
3Q21
|
|
4Q21
|
|
1Q22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gas
Collars:
|
PEPL (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume
(MMBtu/d)
|
100,000
|
|
100,000
|
|
100,000
|
|
90,000
|
|
70,000
|
|
70,000
|
|
40,000
|
|
Wtd Avg
Floor
|
$
|
1.78
|
|
$
|
1.78
|
|
$
|
1.83
|
|
$
|
1.83
|
|
$
|
1.88
|
|
$
|
1.88
|
|
$
|
2.00
|
|
Wtd Avg
Ceiling
|
$
|
2.21
|
|
$
|
2.21
|
|
$
|
2.23
|
|
$
|
2.22
|
|
$
|
2.29
|
|
$
|
2.29
|
|
$
|
2.40
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
El Paso Perm
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume
(MMBtu/d)
|
70,000
|
|
70,000
|
|
70,000
|
|
70,000
|
|
50,000
|
|
50,000
|
|
20,000
|
|
Wtd Avg
Floor
|
$
|
1.36
|
|
$
|
1.36
|
|
$
|
1.50
|
|
$
|
1.50
|
|
$
|
1.64
|
|
$
|
1.64
|
|
$
|
1.85
|
|
Wtd Avg
Ceiling
|
$
|
1.64
|
|
$
|
1.64
|
|
$
|
1.79
|
|
$
|
1.79
|
|
$
|
1.95
|
|
$
|
1.95
|
|
$
|
2.18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Waha (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume
(MMBtu/d)
|
70,000
|
|
70,000
|
|
90,000
|
|
90,000
|
|
70,000
|
|
70,000
|
|
40,000
|
|
Wtd Avg
Floor
|
$
|
1.43
|
|
$
|
1.43
|
|
$
|
1.52
|
|
$
|
1.52
|
|
$
|
1.65
|
|
$
|
1.65
|
|
$
|
1.77
|
|
Wtd Avg
Ceiling
|
$
|
1.73
|
|
$
|
1.73
|
|
$
|
1.83
|
|
$
|
1.83
|
|
$
|
1.98
|
|
$
|
1.98
|
|
$
|
2.15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil
Collars:
|
WTI (3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume
(Bbl/d)
|
41,000
|
|
41,000
|
|
40,000
|
|
30,000
|
|
21,000
|
|
21,000
|
|
7,000
|
|
Wtd Avg
Floor
|
$
|
40.91
|
|
$
|
40.91
|
|
$
|
38.06
|
|
$
|
34.23
|
|
$
|
31.48
|
|
$
|
31.48
|
|
$
|
35.00
|
|
Wtd Avg
Ceiling
|
$
|
49.84
|
|
$
|
49.84
|
|
$
|
46.45
|
|
$
|
42.25
|
|
$
|
39.67
|
|
$
|
39.67
|
|
$
|
45.28
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil Basis
Swaps:
|
WTI Midland
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume
(Bbl/d)
|
32,000
|
|
32,000
|
|
31,000
|
|
25,000
|
|
20,000
|
|
20,000
|
|
7,000
|
|
Wtd Avg
Differential
|
$
|
0.18
|
|
$
|
0.18
|
|
$
|
0.03
|
|
$
|
(0.10)
|
|
$
|
(0.38)
|
|
$
|
(0.38)
|
|
$
|
0.11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil Roll
Differential
Swaps:
|
WTI (3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume
(Bbl/d)
|
—
|
|
—
|
|
7,000
|
|
7,000
|
|
7,000
|
|
7,000
|
|
7,000
|
|
Wtd Avg
Price
|
$
|
—
|
|
$
|
—
|
|
$
|
(0.24)
|
|
$
|
(0.24)
|
|
$
|
(0.24)
|
|
$
|
(0.24)
|
|
$
|
(0.24)
|
Conference call and webcast
Cimarex will host a conference call tomorrow, August 6, 2020 at 11:00
a.m. EST (9:00 a.m.
MST). The call will be webcast and accessible on the
Cimarex website at www.cimarex.com. To join the live,
interactive call, please dial 866-367-3053 ten minutes before the
scheduled start time (callers in Canada dial 855-669-9657 and international
callers dial 412-902-4216). A replay will be available on the
company's website.
Investor Presentation
For more details on Cimarex's second quarter 2020 results,
please refer to the company's investor presentation available at
www.cimarex.com.
About Cimarex Energy
Denver-based Cimarex Energy Co.
is an independent oil and gas exploration and production company
with principal operations in the Permian Basin and Mid-Continent
areas of the U.S.
This press release contains forward-looking statements,
including statements regarding projected results and future events.
In particular, the disclosures under the heading "Outlook" contain
projections for certain 2020 operational and financial
metrics. These forward-looking statements are based on
management's judgment as of the date of this press release and
include certain risks and uncertainties. Please refer to the
company's Annual Report on Form 10-K for the year ended
December 31, 2019, filed with the SEC, and other filings
including our Current Reports on Form 8-K and Quarterly Reports on
Form 10-Q, for a list of certain risk factors that may affect these
forward-looking statements.
Actual results may differ materially from company projections
and other forward-looking statements and can be affected by a
variety of factors outside the control of the company including
among other things: oil, NGL and natural gas price levels and
volatility, including those resulting from demand destruction from
the COVID-19 pandemic; disruptions to the availability of workers
and contractors due to illness and stay at home orders related to
the COVID-19 pandemic; disruptions to gathering, pipeline,
refining, transportation and other midstream and downstream
activities due to the COVID-19 pandemic; disruptions to supply
chains and availability of critical equipment and supplies,
including as a result of the COVID-19 pandemic; the effectiveness
of controls over financial reporting; declines in the values of our
oil and gas properties resulting in impairments; impairments of
goodwill; higher than expected costs and expenses, including the
availability and cost of services and materials, which may be
impacted by the COVID-19 pandemic; our ability to successfully
integrate the March 2019 acquisition
of Resolute Energy Corporation; compliance with environmental and
other regulations; costs and availability of third party facilities
for gathering, processing, refining and transportation; risks
associated with concentration of operations in one major geographic
area; environmental liabilities; the ability to receive drilling
and other permits and rights-of-way in a timely manner, which may
be negatively impacted by COVID-19 restrictions on regulatory
personnel who process and approve those matters; development
drilling and testing results; the potential for production decline
rates to be greater than expected; performance of acquired
properties and newly drilled wells; regulatory approvals, including
regulatory restrictions on federal lands which may be negatively
impacted by a change in administration; legislative or regulatory
changes, including initiatives related to hydraulic fracturing,
emissions and disposal of produced water, which may be negatively
impacted by a change in administration; unexpected future capital
expenditures; economic and competitive conditions; the availability
and cost of capital; the ability to obtain industry partners to
jointly explore certain prospects, and the willingness and ability
of those partners to meet capital obligations when requested;
changes in estimates of proved reserves; derivative and hedging
activities; the success of the company's risk management
activities; title to properties; litigation; the ability to
complete property sales or other transactions; and other factors
discussed in the company's reports filed with the SEC.
Cimarex Energy Co. encourages readers to consider the risks and
uncertainties associated with projections and other forward-looking
statements. In addition, the company assumes no obligation to
publicly revise or update any forward-looking statements based on
future events or circumstances.
|
1
|
Adjusted net income
and adjusted cash flow from operations are non-GAAP financial
measures. See below for reconciliations of the related GAAP
amounts.
|
2
|
PEPL refers to
Panhandle Eastern Pipe Line Tex/OK Mid-Continent index, El Paso
Perm refers to El Paso Permian Basin index, and Waha refers to West
Texas (Waha) Index, all as quoted in Platt's Inside
FERC.
|
3
|
WTI refers to West
Texas Intermediate oil price as quoted on the New York Mercantile
Exchange.
|
4
|
Index price on basis
swaps is WTI NYMEX less the weighted average WTI Midland
differential, as quoted by Argus Americas Crude.
|
RECONCILIATION OF ADJUSTED NET (LOSS)
INCOME
The following reconciles net (loss) income as reported under
generally accepted accounting principles (GAAP) to adjusted net
(loss) income (non-GAAP) for the periods indicated.
|
Three Months
Ended June 30,
|
|
Six Months
Ended June 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
(in thousands, except
per share data)
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
|
(925,147)
|
|
|
$
|
109,309
|
|
|
$
|
(1,699,429)
|
|
|
$
|
135,625
|
|
Impairment of oil and
gas properties (1)
|
941,198
|
|
|
—
|
|
|
1,274,849
|
|
|
—
|
|
Impairment of
goodwill
|
—
|
|
|
—
|
|
|
714,447
|
|
|
—
|
|
Mark-to-market loss
(gain) on open derivative positions
|
187,826
|
|
|
(34,531)
|
|
|
4,000
|
|
|
71,870
|
|
Loss on early
extinguishment of debt
|
—
|
|
|
—
|
|
|
—
|
|
|
4,250
|
|
Acquisition related
costs
|
—
|
|
|
74
|
|
|
—
|
|
|
8,391
|
|
Asset retirement
obligation
|
—
|
|
|
—
|
|
|
2,800
|
|
|
—
|
|
Tax impact
(2)
|
(256,289)
|
|
|
8,166
|
|
|
(289,653)
|
|
|
(20,029)
|
|
Adjusted net (loss)
income
|
$
|
(52,412)
|
|
|
$
|
83,018
|
|
|
$
|
7,014
|
|
|
$
|
200,107
|
|
Diluted earnings
(loss) per share
|
$
|
(9.28)
|
|
|
$
|
1.07
|
|
|
$
|
(17.05)
|
|
|
$
|
1.34
|
|
Adjusted diluted
earnings (loss) per share*
|
$
|
(0.51)
|
|
|
$
|
0.82
|
|
|
$
|
0.07
|
|
|
$
|
2.01
|
|
|
|
|
|
|
|
|
|
Weighted-average
number of shares outstanding:
|
|
|
|
|
|
|
|
Adjusted
diluted**
|
102,114
|
|
|
101,448
|
|
|
102,122
|
|
|
99,592
|
|
______________________________________
|
(1)
|
An additional ceiling
test impairment is anticipated in the third quarter.
|
(2)
|
Because the goodwill
impairment is not deductible for tax purposes, the tax impact in
the 2020 period is calculated using an effective tax rate
determined by excluding goodwill from the effective tax rate
calculation.
|
|
|
|
Adjusted net (loss)
income and adjusted diluted earnings (loss) per share exclude the
noted items because management believes these items affect the
comparability of operating results. The company discloses these
non-GAAP financial measures as a useful adjunct to GAAP measures
because:
|
|
|
|
|
a)
|
Management uses
adjusted net (loss) income to evaluate the company's operating
performance between periods and to compare the company's
performance to other oil and gas exploration and production
companies.
|
|
b)
|
Adjusted net (loss)
income is more comparable to earnings estimates provided by
research analysts.
|
|
|
|
* Does not include
adjustments resulting from application of the "two-class method"
used to determine earnings per share under GAAP.
|
|
|
|
** Reflects the
weighted-average number of common shares outstanding during the
period as adjusted for the dilutive effects of outstanding stock
options.
|
RECONCILIATION OF ADJUSTED CASH FLOW FROM
OPERATIONS, FREE CASH FLOW AND FREE CASH FLOW AFTER
DIVIDEND
The following table provides a reconciliation from generally
accepted accounting principles (GAAP) measures of net cash provided
by operating activities to adjusted cash flows from operations
(non-GAAP), free cash flow (non-GAAP) and free cash flow after
dividend (non-GAAP) for the periods indicated.
|
Three Months
Ended June 30,
|
|
Six Months
Ended June 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
(in
thousands)
|
Net cash provided by
operating activities
|
$
|
144,706
|
|
|
$
|
413,992
|
|
|
$
|
453,497
|
|
|
$
|
664,083
|
|
Change in operating
assets and liabilities
|
(178)
|
|
|
(77,630)
|
|
|
(2,548)
|
|
|
23,341
|
|
|
|
|
|
|
|
|
|
Adjusted cash flow
from operations
|
144,528
|
|
|
336,362
|
|
|
450,949
|
|
|
687,424
|
|
|
|
|
|
|
|
|
|
Oil and gas
expenditures
|
(152,510)
|
|
|
(379,015)
|
|
|
(418,580)
|
|
|
(711,757)
|
|
Other capital
expenditures
|
(11,627)
|
|
|
(22,313)
|
|
|
(38,052)
|
|
|
(40,141)
|
|
Change in capital
accruals
|
68,813
|
|
|
61,085
|
|
|
86,286
|
|
|
14,654
|
|
Free cash
flow
|
49,204
|
|
|
(3,881)
|
|
|
80,603
|
|
|
(49,820)
|
|
|
|
|
|
|
|
|
|
Dividends
paid
|
(23,616)
|
|
|
(21,468)
|
|
|
(45,209)
|
|
|
(38,647)
|
|
Free cash flow after
dividend
|
$
|
25,588
|
|
|
$
|
(25,349)
|
|
|
$
|
35,394
|
|
|
$
|
(88,467)
|
|
Management uses the non-GAAP financial measures of adjusted cash
flow from operations, free cash flow and free cash flow after
dividend as means of measuring our ability to fund our capital
program and dividends, without fluctuations caused by changes in
current assets and liabilities, which are included in the GAAP
measure of net cash provided by operating activities. Management
believes these non-GAAP financial measures provide useful
information to investors for the same reason, and that they are
also used by professional research analysts in providing investment
recommendations pertaining to companies in the oil and gas
exploration and production industry.
OIL AND GAS
CAPITALIZED EXPENDITURES
|
|
|
|
|
|
|
|
Three Months
Ended June 30,
|
|
Six Months
Ended June 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
(in
thousands)
|
Acquisitions:
|
|
|
|
|
|
|
|
Proved
|
$
|
—
|
|
|
$
|
1,200
|
|
|
$
|
7,250
|
|
|
$
|
693,800
|
|
Unproved
|
—
|
|
|
1,000
|
|
|
—
|
|
|
1,051,782
|
|
|
—
|
|
|
2,200
|
|
|
7,250
|
|
|
1,745,582
|
|
|
|
|
|
|
|
|
|
Exploration and
development:
|
|
|
|
|
|
|
|
Land and
seismic
|
12,116
|
|
|
14,552
|
|
|
$
|
26,040
|
|
|
$
|
24,079
|
|
Exploration and
development
|
71,666
|
|
|
310,428
|
|
|
306,394
|
|
|
668,919
|
|
|
83,782
|
|
|
324,980
|
|
|
332,434
|
|
|
692,998
|
|
|
|
|
|
|
|
|
|
Property
sales:
|
|
|
|
|
|
|
|
Proved
|
—
|
|
|
(22,058)
|
|
|
$
|
—
|
|
|
$
|
(18,028)
|
|
Unproved
|
—
|
|
|
(6,253)
|
|
|
(830)
|
|
|
(9,754)
|
|
|
—
|
|
|
(28,311)
|
|
|
(830)
|
|
|
(27,782)
|
|
|
|
|
|
|
|
|
|
|
$
|
83,782
|
|
|
$
|
298,869
|
|
|
$
|
338,854
|
|
|
$
|
2,410,798
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(LOSS)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended June 30,
|
|
Six Months
Ended June 30,
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
(in thousands, except
per share information)
|
Revenues:
|
|
|
|
|
|
|
|
|
Oil sales
|
|
$
|
138,817
|
|
|
$
|
411,766
|
|
|
$
|
499,797
|
|
|
$
|
761,072
|
|
Gas and NGL
sales
|
|
100,261
|
|
|
126,044
|
|
|
198,742
|
|
|
343,959
|
|
Gas gathering and
other
|
|
10,305
|
|
|
8,653
|
|
|
23,674
|
|
|
18,389
|
|
|
|
249,383
|
|
|
546,463
|
|
|
722,213
|
|
|
1,123,420
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
Impairment of oil and
gas properties
|
|
941,198
|
|
|
—
|
|
|
1,274,849
|
|
|
—
|
|
Depreciation,
depletion, amortization, and accretion
|
|
196,615
|
|
|
215,484
|
|
|
416,425
|
|
|
407,950
|
|
Impairment of
goodwill
|
|
—
|
|
|
—
|
|
|
714,447
|
|
|
—
|
|
Production
|
|
64,337
|
|
|
88,995
|
|
|
151,573
|
|
|
167,399
|
|
Transportation,
processing, and other operating
|
|
53,282
|
|
|
54,107
|
|
|
108,204
|
|
|
113,682
|
|
Gas gathering and
other
|
|
3,526
|
|
|
6,560
|
|
|
11,824
|
|
|
11,742
|
|
Taxes other than
income
|
|
16,486
|
|
|
41,033
|
|
|
47,447
|
|
|
74,727
|
|
General and
administrative
|
|
26,226
|
|
|
24,911
|
|
|
51,735
|
|
|
53,995
|
|
Stock
compensation
|
|
6,747
|
|
|
6,494
|
|
|
13,141
|
|
|
13,207
|
|
Loss (gain) on
derivative instruments, net
|
|
123,885
|
|
|
(40,768)
|
|
|
(103,055)
|
|
|
74,684
|
|
Other operating
expense, net
|
|
130
|
|
|
590
|
|
|
381
|
|
|
8,916
|
|
|
|
1,432,432
|
|
|
397,406
|
|
|
2,686,971
|
|
|
926,302
|
|
|
|
|
|
|
|
|
|
|
Operating (loss)
income
|
|
(1,183,049)
|
|
|
149,057
|
|
|
(1,964,758)
|
|
|
197,118
|
|
|
|
|
|
|
|
|
|
|
Other (income) and
expense:
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
23,047
|
|
|
24,674
|
|
|
46,228
|
|
|
45,079
|
|
Capitalized
interest
|
|
(12,939)
|
|
|
(16,805)
|
|
|
(26,121)
|
|
|
(25,547)
|
|
Loss on early
extinguishment of debt
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,250
|
|
Other, net
|
|
3,496
|
|
|
(2,167)
|
|
|
2,625
|
|
|
(4,408)
|
|
|
|
|
|
|
|
|
|
|
(Loss) income before
income tax
|
|
(1,196,653)
|
|
|
143,355
|
|
|
(1,987,490)
|
|
|
177,744
|
|
Income tax (benefit)
expense
|
|
(271,506)
|
|
|
34,046
|
|
|
(288,061)
|
|
|
42,119
|
|
Net (loss)
income
|
|
$
|
(925,147)
|
|
|
$
|
109,309
|
|
|
$
|
(1,699,429)
|
|
|
$
|
135,625
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
share to common stockholders:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(9.28)
|
|
|
$
|
1.07
|
|
|
$
|
(17.05)
|
|
|
$
|
1.34
|
|
Diluted
|
|
$
|
(9.28)
|
|
|
$
|
1.07
|
|
|
$
|
(17.05)
|
|
|
$
|
1.34
|
|
|
|
|
|
|
|
|
|
|
Dividends declared
per common share
|
|
$
|
0.22
|
|
|
$
|
0.20
|
|
|
$
|
0.44
|
|
|
$
|
0.40
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
number of shares outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
|
99,880
|
|
|
99,658
|
|
|
99,861
|
|
|
97,800
|
|
Diluted
|
|
99,880
|
|
|
99,665
|
|
|
99,861
|
|
|
97,809
|
|
|
|
|
|
|
|
|
|
|
Comprehensive (loss)
income:
|
|
|
|
|
|
|
|
|
Net (loss)
income
|
|
$
|
(925,147)
|
|
|
$
|
109,309
|
|
|
$
|
(1,699,429)
|
|
|
$
|
135,625
|
|
Other comprehensive
income:
|
|
|
|
|
|
|
|
|
Change in fair value
of investments, net of tax of $0, $89, $0 and $428,
respectively
|
|
—
|
|
|
304
|
|
|
—
|
|
|
1,453
|
|
Total comprehensive
(loss) income
|
|
$
|
(925,147)
|
|
|
$
|
109,613
|
|
|
$
|
(1,699,429)
|
|
|
$
|
137,078
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended June 30,
|
|
Six Months
Ended June 30,
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
(in
thousands)
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
Net (loss)
income
|
|
$
|
(925,147)
|
|
|
$
|
109,309
|
|
|
$
|
(1,699,429)
|
|
|
$
|
135,625
|
|
Adjustments to
reconcile net (loss) income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
Impairment of oil and
gas properties
|
|
941,198
|
|
|
—
|
|
|
1,274,849
|
|
|
—
|
|
Depreciation,
depletion, amortization, and accretion
|
|
196,615
|
|
|
215,484
|
|
|
416,425
|
|
|
407,950
|
|
Impairment of
goodwill
|
|
—
|
|
|
—
|
|
|
714,447
|
|
|
—
|
|
Deferred income
taxes
|
|
(271,543)
|
|
|
34,046
|
|
|
(287,900)
|
|
|
42,119
|
|
Stock
compensation
|
|
6,747
|
|
|
6,494
|
|
|
13,141
|
|
|
13,207
|
|
Loss (gain) on
derivative instruments, net
|
|
123,885
|
|
|
(40,768)
|
|
|
(103,055)
|
|
|
74,684
|
|
Settlements on
derivative instruments
|
|
63,941
|
|
|
6,237
|
|
|
107,055
|
|
|
(2,814)
|
|
Loss on early
extinguishment of debt
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,250
|
|
Amortization of debt
issuance costs and discounts
|
|
818
|
|
|
783
|
|
|
1,602
|
|
|
1,502
|
|
Changes in non-current
assets and liabilities
|
|
4,609
|
|
|
601
|
|
|
7,019
|
|
|
2,749
|
|
Other, net
|
|
3,405
|
|
|
4,176
|
|
|
6,795
|
|
|
8,152
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
85,010
|
|
|
83,716
|
|
|
204,615
|
|
|
117,692
|
|
Other current
assets
|
|
1,519
|
|
|
(1,111)
|
|
|
1,495
|
|
|
(761)
|
|
Accounts payable and
other current liabilities
|
|
(86,351)
|
|
|
(4,975)
|
|
|
(203,562)
|
|
|
(140,272)
|
|
Net cash provided by
operating activities
|
|
144,706
|
|
|
413,992
|
|
|
453,497
|
|
|
664,083
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
Acquisition of
Resolute Energy, net of cash acquired
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(284,441)
|
|
Oil and gas capital
expenditures
|
|
(152,510)
|
|
|
(379,015)
|
|
|
(418,580)
|
|
|
(711,757)
|
|
Other capital
expenditures
|
|
(11,627)
|
|
|
(22,313)
|
|
|
(38,052)
|
|
|
(40,141)
|
|
Sales of oil and gas
assets
|
|
—
|
|
|
8,233
|
|
|
830
|
|
|
13,233
|
|
Sales of other
assets
|
|
1,007
|
|
|
234
|
|
|
1,188
|
|
|
434
|
|
Net cash used by
investing activities
|
|
(163,130)
|
|
|
(392,861)
|
|
|
(454,614)
|
|
|
(1,022,672)
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
Borrowings of
long-term debt
|
|
60,000
|
|
|
528,000
|
|
|
161,000
|
|
|
1,710,310
|
|
Repayments of
long-term debt
|
|
(60,000)
|
|
|
(528,000)
|
|
|
(161,000)
|
|
|
(2,081,000)
|
|
Financing,
underwriting, and debt redemption fees
|
|
(1,457)
|
|
|
(853)
|
|
|
(1,557)
|
|
|
(11,791)
|
|
Finance lease
payments
|
|
(1,343)
|
|
|
(920)
|
|
|
(2,808)
|
|
|
(1,555)
|
|
Dividends
paid
|
|
(23,616)
|
|
|
(21,468)
|
|
|
(45,209)
|
|
|
(38,647)
|
|
Employee withholding
taxes paid upon the net settlement of equity-classified stock
awards
|
|
(24)
|
|
|
—
|
|
|
(189)
|
|
|
(654)
|
|
Proceeds from exercise
of stock options
|
|
—
|
|
|
594
|
|
|
—
|
|
|
674
|
|
Net cash used by
financing activities
|
|
(26,440)
|
|
|
(22,647)
|
|
|
(49,763)
|
|
|
(422,663)
|
|
Net change in cash
and cash equivalents
|
|
(44,864)
|
|
|
(1,516)
|
|
|
(50,880)
|
|
|
(781,252)
|
|
Cash and cash
equivalents at beginning of period
|
|
88,706
|
|
|
20,930
|
|
|
94,722
|
|
|
800,666
|
|
Cash and cash
equivalents at end of period
|
|
$
|
43,842
|
|
|
$
|
19,414
|
|
|
$
|
43,842
|
|
|
$
|
19,414
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS (unaudited)
|
|
|
|
|
|
|
|
June 30,
2020
|
|
December 31,
2019
|
Assets
|
|
(in thousands, except
share and
per share information)
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
43,842
|
|
|
$
|
94,722
|
|
Accounts receivable,
net of allowance
|
|
244,826
|
|
|
448,584
|
|
Oil and gas well
equipment and supplies
|
|
51,184
|
|
|
47,893
|
|
Derivative
instruments
|
|
71,590
|
|
|
17,944
|
|
Other current
assets
|
|
12,660
|
|
|
12,343
|
|
Total current
assets
|
|
424,102
|
|
|
621,486
|
|
Oil and gas
properties at cost, using the full cost method of
accounting:
|
|
|
|
|
Proved
properties
|
|
21,014,098
|
|
|
20,678,334
|
|
Unproved properties
and properties under development, not being amortized
|
|
1,258,002
|
|
|
1,255,908
|
|
|
|
22,272,100
|
|
|
21,934,242
|
|
Less – accumulated
depreciation, depletion, amortization, and impairment
|
|
(18,373,655)
|
|
|
(16,723,544)
|
|
Net oil and gas
properties
|
|
3,898,445
|
|
|
5,210,698
|
|
Fixed assets, net of
accumulated depreciation of $423,873 and $389,458,
respectively
|
|
478,553
|
|
|
519,291
|
|
Goodwill
|
|
—
|
|
|
716,865
|
|
Derivative
instruments
|
|
—
|
|
|
580
|
|
Other
assets
|
|
68,688
|
|
|
71,109
|
|
|
|
$
|
4,869,788
|
|
|
$
|
7,140,029
|
|
Liabilities,
Redeemable Preferred Stock, and Stockholders' Equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
|
25,032
|
|
|
$
|
49,020
|
|
Accrued
liabilities
|
|
268,462
|
|
|
418,978
|
|
Derivative
instruments
|
|
51,556
|
|
|
16,681
|
|
Revenue
payable
|
|
102,824
|
|
|
207,939
|
|
Operating
leases
|
|
56,901
|
|
|
66,003
|
|
Total current
liabilities
|
|
504,775
|
|
|
758,621
|
|
Long-term debt
principal
|
|
2,000,000
|
|
|
2,000,000
|
|
Less—unamortized debt
issuance costs and discounts
|
|
(13,729)
|
|
|
(14,754)
|
|
Long-term debt,
net
|
|
1,986,271
|
|
|
1,985,246
|
|
Deferred income
taxes
|
|
50,524
|
|
|
338,424
|
|
Derivative
instruments
|
|
23,210
|
|
|
1,018
|
|
Operating
leases
|
|
155,023
|
|
|
184,172
|
|
Other
liabilities
|
|
217,518
|
|
|
214,787
|
|
Total
liabilities
|
|
2,937,321
|
|
|
3,482,268
|
|
Redeemable preferred
stock - 8.125% Series A Cumulative Perpetual Convertible Preferred
Stock, $0.01 par value, 62,500 shares authorized and
issued
|
|
81,620
|
|
|
81,620
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
Common stock, 0.01 par
value, 200,000,000 shares authorized, 102,151,096 and 102,144,577
shares issued, respectively
|
|
1,022
|
|
|
1,021
|
|
Additional paid-in
capital
|
|
3,241,244
|
|
|
3,243,325
|
|
(Accumulated deficit)
retained earnings
|
|
(1,391,419)
|
|
|
331,795
|
|
Total stockholders'
equity
|
|
1,850,847
|
|
|
3,576,141
|
|
|
|
$
|
4,869,788
|
|
|
$
|
7,140,029
|
|
View original
content:http://www.prnewswire.com/news-releases/cimarex-reports-second-quarter-2020-results-301107036.html
SOURCE Cimarex Energy Co.